The entry age to join the term plan policy is between 18 years and 70 years. It is not a very important variable as almost all the entrants take this policy more as a hedge than as an investment product. Hence, we have assigned a weightage of 5 points for maximum age cover.
This refers to the minimum insurance cover of the term plan policy and is perceived as an
influential variable, but does not majorly affect the decision of the buyer. So the weight assigned is 5 points.
Most buyers are cost-conscious, so we have taken this as the most important variable that can affect a consumer’s buying decision. The weightage assigned is 15 points.
Maximum Sum Assured
Of all the insurance companies we evaluated, there is no policy with cover of less than Rs 24 lakh. This is the fourth influential variable for the consumer and can affect his decision. We assigned 10 points to this.
Minimum Policy Term
Amongst the insurance companies taken up for product comparison, none of them offer less than five years as the minimum policy term. This casts only a minor influence on the consumer decision and is weighted at 5 points.
Maximum Policy Term
This variable has been identified as the fifthmost important influential factor affecting the consumer’s decision while taking a policy. No insurance company in our list offers less than 20 years cover. So, we have assigned 10 points to this factor.
A minor variable, but it can influence the consumer’s decision in choosing the premium mode. Insurance companies are offering onetime payment or yearly, half-yearly, quarterly and monthly payment options. We have assigned 5 points.
A few of the insurance companies are offering surrender value when the policyholder decides to discontinue the policy during the policy period (after the mandatory period or a number of paid premiums). As this makes sense to consumers, we have assigned 10 points.
A few of the insurance companies are extending this benefit on payment of additional premium, but this does not directly bear much influence on the consumer’s decision. Hence we have assigned 5 points to it.
A couple of the insurance companies under the term insurance plan offer this benefit wherein policy matures at the end of the policy period and if the insured survives the policy, they get the deposited premium amount plus a nominal amount as ‘return’. As this is the second-most influential factor for the consumer, we have assigned 10 points.
This is perceived as the most influential variable and can be the deciding factor for the consumer. The more the percentage of claims settled, the better rating the insurance company will have in the mind of the consumer. Hence we have assigned it 20 points.